House Offer to Blunt Impasse Criticized by Democrats

By Roxana Tiron, Kathleen Hunter and Heidi Przybyla -
Oct 1, 2013

A Republican proposal to approve
spending for a handful of federal agencies was swiftly
criticized by Democrats, extending the impasse that forced the
first partial U.S. government shutdown in 17 years.

House Republican leaders pushed a plan today for stopgap
spending bills through Dec. 15 for the Washington, D.C.,
government, the Department of Veterans Affairs and the National
Park Service.

That approach, in which Republicans offered limited
exceptions to their insistence on tying government funding to
limits on President Barack Obama’s Affordable Care Act, would
blunt some of the political damage from the shutdown. All three
bills failed in the House today because Republican leaders used
a procedure that required Democratic votes.

“It’s pathetic,” said House Minority Leader Nancy Pelosi,
a California Democrat. “It’s not responsible. It’s beneath the
dignity. I keep saying that, but it’s further beneath the
dignity.”

As Congress sought to find a way out of the impasse, the
absence of high-level negotiations on spending legislation made
it more likely that the feud would merge with the more
consequential fight later this month over how to raise the U.S.
debt limit to avoid a first-ever government default.

Trading Volleys

House Republicans made their piecemeal proposal hours after
the U.S. Senate rejected the latest version of a House spending
bill on a party-line vote. It was the third time in less than 24
hours that the Senate rebuffed Republican spending legislation
that included provisions to curtail the Affordable Care Act,
also known as Obamacare.

Senate Majority Leader Harry Reid, a Nevada Democrat, said
Republicans should “stop the games” and said the Senate would
reject the piecemeal bills had they passed. The White House
issued a veto threat.

Michael Steel, a spokesman for House Speaker John Boehner,
said Obama was being “sustainability hypocritical” in
rejecting the parks, veterans and Washington bills because he
signed a bill yesterday allowing U.S. troops to be paid during a
shutdown.

So far, there was little external pressure to reach a deal.
U.S. stocks rose, after the Standard & Poor’s 500 Index (SPX) fell to
a three-week low, as investors speculated the economic effects
of the partial government shutdown would be limited.

Stocks Rose

The S&P 500 rose 0.8 percent to 1,695 at 4:11 p.m. in New
York, after declining yesterday for the seventh time in the past
eight sessions. Treasury 10-year yields rose three basis points,
or 0.03 percentage points, to 2.64 percent at 3:40 p.m. The S&P
GSCI gauge of 24 commodities declined 0.5 percent as precious
and industrial metals led losses, with gold futures tumbling 2.8
percent to $1,289.80 an ounce at 2:41 p.m.

House Republicans are divided between hard-liners insisting
on continued confrontation and at least seven others who say
they would support a spending bill to end the shutdown without
health-law conditions attached.

“This is the lemming strategy,” Representative Devin Nunes, a California Republican, told reporters after the closed-door meeting, referring to a group of Republicans who want to
stop the health-care law and are aligned with Senator Ted Cruz,
a Texas Republican. “This is all Ted Cruz, we are following
exactly to a T what they want to do.”

New York Republican Tom Reed said the latest approach
outlined by his party’s leadership is for “taking this one step
at a time” toward an agreement to reopen the government.

‘Very Concerned’

“Hopefully, this actually sets the stage for us to get to
the table and talk and work out our differences,” Reed said in
an interview. “We are very concerned about the veterans” and
the measure will help Republicans “see what Democrats are
willing to join with us to support.”

The first shutdown in 17 years, including the furlough of
almost 800,000 employees and closing of offices, parks and
museums, may cost the U.S. at least $300 million a day in lost
economic output at the start, according to IHS Inc. (IHS)

Though that’s a fraction of the country’s $15.7 trillion
annual economy, the effects may grow over time as consumers and
businesses defer purchases and expansion plans.

Voters disapprove of the job being done by congressional
Republicans by 74 percent to 17 percent -- their lowest score
ever -- while disapproving of Democrats’ job 60 percent to 32
percent, according to a national poll released today by
Quinnipiac University.

Job Approval

Obama had a 45 percent to 49 percent overall job approval
rating, compared with his 46 percent to 48 percent score Aug. 2,
according to the survey, which has a margin of error of plus or
minus 2.5 percentage points.

“Voters are angry at almost everyone in Washington over
their inability to keep the trains running, but they are madder
at the Republicans than the Democrats,” said Peter A. Brown,
assistant director of the Hamden, Connecticut-based polling
institute.

Both sides jockeyed today to place blame on the other side.
Democrats said the nation was being taken hostage by the
Republicans’ Tea Party faction, while the Republicans blamed
Senate Democrats and Obama for being unwilling to negotiate over
measure to delay or curtail the Affordable Care Act.

More Compromise

“Every piece of legislation the House sent over would have
kept the government from shutting down,” Senate Minority Leader
Mitch McConnell of Kentucky said following today’s vote, adding
that each House proposal was more of a compromise than the
previous plan. Democrats “seem completely opposed to
negotiation or compromise” on Obamacare even at the cost of a
shutdown, he said.

Financial markets are overconfident that the stalemate will
be resolved in time to avoid major economic damage, White House
economic adviser Gene Sperling said today.

“There is a false sense of complacency among some in the
market that somehow things will be always solved at midnight,”
Sperling, the director of Obama’s National Economic Council,
told Bloomberg News reporters and editors.

“Unless sensible people in the Republican Party are
willing to take back control of their party,” he said, “there
is a much more serious risk of a negative economic and financial
event.”

‘Way Out’

Senator John McCain, an Arizona Republican, said the
situation isn’t as grim as it appears.

“Believe me, there are some conversations going on,” he
said. “The House Republicans are looking for a way out of this
because of a reaction from the American people, but they are
also trying to preserve their position and it’s a very difficult
situation for them.”

Many federal employees reporting to work were given a few
hours to complete shutdown activities, such as securing files
and posting closed signs and phone messages, before being sent
home until Congress passes a spending measure for the new fiscal
year, which began today.

One government operation that will continue is the start of
enrollment in the health-insurance exchanges mandated under
Obama’s health-care law, which many Republicans oppose. That’s
because it’s paid by mandatory funding unaffected by the lapse.

“It is settled and it is here to stay,” Obama said today
at the White House.

During the partial government shutdown, many essential
government operations will cease. Internal Revenue Service call
centers will close and more than 90 percent of Environmental
Protection Agency workers will stay home. National parks and
museums will be shuttered. The U.S. military academies suspended
intercollegiate athletics and the Bureau of Labor Statistics
said it wouldn’t release the Oct. 4 unemployment report if the
shutdown continues.

Other services will continue uninterrupted even if workers
go unpaid. Social Security and Medicare benefits will be paid.
U.S. troops will remain at their posts around the world and will
be paid under a bill Obama signed yesterday. Air-traffic
controllers and airport security screeners will keep working.